Review of water firms’ deals still on — DOJ

December 10, 2019

JUSTICE Secretary Menardo Guevarra yesterday said that the government would still review the Metropolitan Waterworks and Sewerage System’s (MWSS) 1997 concession agreements with Maynilad and Manila Water despite their decision to no longer collect the almost P11 billion indemnification they sought from the government.

“Certainly,” Guevarra said when asked if the government will continue to review the contracts in a bid to remove the supposed onerous provisions.

Guevarra welcomed the decision of the two water concessionaires not to collect the compensation, saying this was a “gracious manifestation” on their part.

“This is a very positive development. Although the President has said that the government will not pay these arbitral awards, at least during his term. Anyway, this gracious manifestation on the part of the water concessionaires nonetheless removes a potential liability from the books of account of the government.”

“But as I said before, the issue of paying the arbitral award is not as important as ensuring that disputes arising from burdensome provisions of the water concession agreements will never happen again in the future,” Guevarra saiid.

The President has insisted that the government would not honor the arbitral court ruling.

Duterte also threatened to sue the two concessionaires after Guevarra said the contracts awarded to them contained some “onerous provisions.”

A Singapore-based arbitration panel ordered the government to pay Manila Water P7.39 billion in years’ worth of losses due to the MWSS’ reduction of water rates instead of approving their proposed rate hikes. Meanwhile, Maynilad scored an order for a P3.424-billion reimbursement in 2017. 

Guevarra said that the government stands to lose billions of pesos to Maynilad and Manila Water because of two “disadvantageous” provisions in its 22-year-old agreements with the two water concessionaires.

Guevarra said these two provisions were the reason why the government was ordered by the arbitration court to pay the water concessionaires the hefty amounts.